American high-speed cable networks are not required to provide access to rival internet service companies, the US Supreme Court ruled on Monday in a case watched for implications on competition for internet access.
Justice Clarence Thomas, writing for a 6-3 majority, agreed with the Federal Communications Commission (FCC) that ”cable companies that sell broadband internet service do not provide ‘telecommunications service”’ that would have to be open to competitors.
Thomas wrote that the 1996 telecom law ”regulates telecommunications carriers, but not information-service providers, as common carriers.”
The ruling represents a win for the lightly regulated cable industry and paves the way for the federal regulators to ease open-access obligations on big phone carriers such as Verizon Communications and BellSouth Corp.
”This opens the path for the phone companies to get regulatory relief,” said Cynthia Brumfield, president of Broadband Insight, a technology-research firm based in Maryland.
The Brand X case has been closely watched by industry groups who say it could help shape the future of internet access. It grew out of a lawsuit filed several years ago by Brand X Internet Services, a small internet provider in Santa Monica, California.
”With growing concerns about the erosion of US global competitiveness, giving cable and telephone monopolies the ability to stifle innovation by discriminating against internet service providers and applications developers, whose services might compete with their franchise products, is foolhardy,” said a statement by three US consumer organisations.
Consumers Union, the Consumer Federation of America and Free Press said the decision abandons a principle that ”has historically applied to roads, canals, railroads, steamships, airlines, telegraph, and telecommunications.”
EarthLink, the nation’s second-largest independent internet provider, said the ruling would keep cable broadband prices high and stifle innovation.
Representative Ed Markey of Massachusetts, a leading Democrat on communications issues, called the ruling ”both anti-consumer and anti-competition.”
The cable industry, however, argued it would have little incentive to invest in high-speed networks if companies had to let rivals gain access at cheap wholesale rates. The industry also urged the court to defer to the expertise of federal regulators.
Brand X argued that the technical distinction was meaningless and that cable high-speed access and a similar service offered by phone companies, known as DSL, are basically the same.
The Ninth US Circuit Court of Appeals ruled in favour of Brand X.
The Supreme Court reversed the ruling and sent the case back to the lower court.
Justices said that the FCC provided a ”reasoned explanation” for its separate treatment of phone and cable networks as part of a longstanding government policy to deregulate communications markets. ‒Sapa-AFP